A new survey indicates that Gen Y consumers—a.k.a., Millenials, those born roughly between 1982 and 1993—are more interested in hybrids and electric cars than they are in traditional, gas-powered automobiles. The problem, from the automaker’s point of view, is that thus far consumers in this age demographic haven’t shown nearly as much interest in cars as the generations that came before them.
Based on the results of a study conducted by Deloitte, it’s clear that if Gen Y are going to own cars, they prefer vehicles with some degree of “electrification.” In other words, they like hybrids or EVs, which to varying degrees both utilize battery power rather than old-fashioned gasoline power.
A majority (59%) of those polled said they prefer an “electrified vehicle” (hybrid of EV) to a car or truck with any other style of powertrain. For now, hybrids such as the Prius are the clear favorite, with 57% selecting that option over all others. Only 2% of Gen Y consumers would pick a pure EV at this point—understandable because of the “range anxiety” associated with electric cars like the Nissan Leaf, which can be driven a maximum of 100 miles before needing a recharge.
The survey results bode well in the long run for sales of hybrids, which had a bad 2011. The year was a relatively good one for overall sales, increasing by around 11% from 2010, yet hybrids accounted for just 2.2% of all vehicles sold in the U.S., down from 2.4% the year before.
Craig Giffi, an automotive consultant who works with Deloitte on its annual survey of Gen Y drivers, tells the Los Angeles Times that this group of consumers will be “game changers” for the auto industry:
“At nearly 80 million strong, they are one of the biggest automobile buying market segments and the largest consumer segment since the baby boomers,” he said.
About 1 out of 4 new automobiles sold this year, and 40% of vehicles sold in the next 10 years, will be purchased by Gen Y consumers, according to the accounting firm.
Given that this group is already interested in “electrified” cars, and that gas prices are likely to creep upward, perhaps passing $4 or even $5 a gallon, and that government regulations will force automakers to improve mpg ratings fleetwide, the future of hybrids, EVs, and more fuel-effient seems especially bright.
What happens, however, if a broad swath of Gen Y decides that they can go without cars entirely?
Recent studies have shown a noticeable drop in the percentage of American teenagers and 20-somethings with drivers’ licenses. The decline has been blamed on the recession, as well as rising costs related to auto insurance and gasoline, and even on the Internet, texting, and smartphones. The idea is that because young people today are so connected, there’s less reason to need a car.
Another survey focusing on Millenials released last year indicated that this demographic isn’t particularly antsy to get behind the wheel. The study, which was conducted by an independent research firm but sponsored by the car-sharing service ZipCar—which obviously has an interest in discouraging car ownership—showed that 69% of consumers ages 18 to 34 would drive less if alternative options like public transportation or (naturally) car sharing were readily available and convenient in their area.
Like so many things, the results of this survey pretty much come down to money. The reason given most often for reduced driving was the high cost of owning a car.
The success or failure of hybrids and EVs will also come down to money: If and when drivers of all generations decide they’re better values than the other options on the market, sales will take off.